The rate increases carried out by the European Central Bank since July of last year (from 0% to 3.75%) have significantly increased the interest on mortgages granted in our country. According to the Bank of Spain, the rate applied to housing loans was 1.70% before the summer of 2022, while in March 2023 (the latest period for which data is available) it already amounted to more than double: 3 .54%
This is bad news for those looking for financing to buy a house or a flat, since their installments will be significantly higher than those they would pay if they had signed their mortgage a year ago. However, according to the HelpMyCash.com banking comparator, these customers do not have to resign themselves to paying much more than necessary: if certain steps are followed, you can still get competitive conditions and save good money in interest, commissions and others bills.
First of all, it must be borne in mind that the better the economic situation of the applicant, the more likely he is to obtain a mortgage with attractive conditions. The logic is as follows: the bank, when lending its money, wants to run as little risk of default as possible. Consequently, if the client's profile is good, it will reward you with a cheaper mortgage loan than it would offer you if you were somewhat less creditworthy.
But what is meant by having a good profile? According to HelpMyCash, the prototype of a solvent client is the one that meets the following requirements: have enough savings to pay 20% of the price of the house plus an additional 10% representing the purchase and sale expenses, have a stable job, enjoy seniority employment (at least two years in the same company), being able to dedicate less than a third of the salary to pay future mortgage installments and have little or no current debt.
Second, it's important not to limit the options available. A common mistake, according to the financial comparator experts, is to request the mortgage only from the bank of which you are a client. Certainly, it is the most comfortable option, since it is the entity that best knows the economic situation of the applicant and the one that has his confidence. However, your mortgage offer may not be the most attractive.
The only way to know if a bank's mortgage is competitive is to compare its conditions with those offered by others. And for this it is essential to request financing from as many entities as possible. In this way, the client will be able to make numbers and assess which proposal is more convenient for him.
Of course, when comparing options, the applicant should not look only at the interest rate applied. The fine print of the mortgage includes other expenses that can trigger its price: opening commissions, products that must be contracted to obtain the interest on the offer (insurance, accounts, pension plans...), etc. All these items must be taken into account to determine which mortgage loan is the cheapest.
Finally, it is necessary to know that the initial offer of a bank is not carved in stone: if the client's profile is good, he can negotiate better conditions than those proposed by the entity at first. It is possible to get a lower interest, eliminate certain commissions, reduce the number of associated products necessary for the applied rate to be attractive...
For example, the best fixed mortgages that banks advertise on their websites have an interest rate of around 3%. However, from the HelpMyCash comparator they ensure that some entities can offer fixed rates of around 2.5% if the applicant enjoys a good economic situation and negotiates; especially if you have attractive offers from other financial companies.
If the client does not have time to negotiate or does not know how to do it, they can also entrust this task to a broker or mortgage intermediary. This professional allows you to save time and money: apply for mortgages from several banks and try to reach an agreement with all of them to get the best possible conditions. Sometimes, yes, they can charge fees, so it is convenient to do numbers to assess if their services will pay off.